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•     SILVER 

Its  True_ Place  in  the  Circulation 

A    LECTURK 

Delivered      on      6tli      May.      18Q2 

AT     I  Jlli 

ACADEMY  OF  SCIENCES 

Market  Street,  San  Francisco.  y 


BEFORK    THK 


TECHNICAL  SOCIETY  OF  THE  PACIFIC  COAST 

BY 

J.  W.  TREADWELL 

Editor  of  the  California  Bankers'  Magazine 

■10  Mont^ntinry   lUoik,  Suit  Ft uithisci',   Cal. 

ILLUSTRATED   BY   GEOMETRICAL   DIAGRAMS 


l\,      ,.,,    /'I'  r.  Btnch^  Bookseller,  107  Montgom-'v 
And  all  Booksellers 

(.'ofviiiiiiiT,  18'j2-  .1.  W.  Tkkai>wki.i. 


TELEPHONE   No.  858 


Cunningham,  Curtiss  &  Welch 


Wholesale  and  Importing 


STATIONERS 


PRINTERS 


AND 


Blank  Book  Manufacturers 


BLANK    BOOKS    FROM   CRANE    BROS.'    GOLD    MEDAL 
LINEN     LEDGER    PAPERS 


327,  329  &  331  SANSOME  ST. 


SAN    FRANCISCO,    CAL. 


le  adjoiniug  diagram  shows  the  volume  of 
silver  produced  from  1873  to  1890,  inclusive. 
51,500,OO0.OOU.  beginuing  with  |C2.000,000  in  187tt, 
o  J132,0(10,O0O  ill  1800,  and  the  whole  large 
square  shows  the  voIuiul'  of  silver  to  be  produced 
e  coiitiug  twenty  years— to  lOHl  A.  D.,  tlie  first 
I81II.  bciug  ♦Ul,W«,onO,  and  the  total 
$3,000,000,000. 

The  obliquely-crossed  columns  show  cre<lit  paper 
badly  based,  or  not  based  at  all,  like  the  ^3,000,000 
]  the  Rank  of  England.  The  Euroiieaii  nations 
re  represented  at  top — the  South  American  at  foot. 
The  total  bad  paper  is  (:*.  600. 000.001). 

The  columns  crossed  horizontally  show  good 
bank  paper.  One  |20  gold  piece  is  shown,  and  by 
t  side  the  30  silver  dollars  you  can  buj-  with  it, 
liile  the  20  silver  dollars  for  which  it  passes  m 


■  :  o  o  o  o  o 
o 

""^  O  O     O         «o 

o    o    o    o 
o  o 

oooooooo 
o    o         o    o 
o       o 

^000° 


_i200.000.000. 


SILVER 

Its  True  Place  in  the  Circulation 


Delivered      on      Otli      Ivlay,     18S2 

AT    TlIK 

ACADEMY  OF  SCIENCES 

Market  Street,  Fan  I'rancisco. 

IlEFOIE    THE 

TECHNICAL  SOCIETY  OF  THE  PACIFIC  COAST 

J.  W.  TREADWELL 

ICditor  of  the  California  ]'>ankcrs'  Magazine 

C'O  ^Ii^nlgomery   J  link,   Siin   J-'r,incisct>,    Cul, 

ILLUSTRATED   BY   GEOMETRICAL   DIAGRAMS 


HK 1  CI : ,  u n  c  1^: x 'i^cs 


For  ^ale  by  C.  Utac/t,  Vookselltr,  107  Montgoviery  Street^  San  J-'ranciseo 
Anii  all  booksellers 

CopvRiouT,  1892- J.  W,  Tbkaowkll 


SYNOPSIS 


LECTURE  ON  SILVER, 


The  subject  matter  of  this  lecture  may  be  considered  under  7  headings : 

1.  Debased  silver  coins  at  65  cents  O'a  the  100. 

2.  The  proKpective  yield  of  silver  and  free  coinage. 

3.  The  false  foundation  of  the  Bank  of  England,    and    its  corrupt- 
ing effect  upon  the  human  race. 

i.     The  European  and  other  foreign  paper  issues. 

5.  The  enormous  paper  issues  of  the  U.  S.   A.,    which  are  uncon- 
stitutional. 

6.  The  driving  out  of  silver  by  these  credit  papers,  and  th^t  i3  the 
real  reason  of  its  fall. 

7.  A  True  Silver  Bank  note,  like  that  of  the  Bank  of  France, 
which  gains  gold  all  the  time,  and  keeps  §700,000,000  silver  in  full  circula- 
tion at  par. 

With  these  demonstrations  drawn  from  the  premisses: 

A.  All  credit  paper  to  be  abolished  in  the  U.  S.  A. 

B.  Banks  to  be  federated  in  Clearing  Houses. 

C.  The  Clearing  Houses  to  be  federated  into  a  Central  Bank  of  Issue. 

D.  A  silver  United  States  note,  to  be  issued  through  the  Central  Bank. 

E.  In  Europe  the  same  plans  to  follow. 

F.  The  European  armies  to  be  put  to  work  upon  canals,  roads,  irriga- 
tion and  transport  roads.  And  so  the  value  to  bo  raised  to  redeem  tho 
credit  paper. 

G.  Fund  all  tho  floating  credit  paper. 

J.  W.  TEE  AD  WELL,. 


oc 


est 

C3 


SILVER 


ITS  TRIJR  PI^ACE  IX  THE    CIRCTJTLA.XION 


^  Ltctu-f  liili-'tieii  on  Oth  Miiy,  IS'J.3,  nl  the  Academy  of  ScUnctm. 

San  Francisco,  before  the    Technical  Society 

of  the  Pacific   Coast 


BY 

J.    W.    TREADWELL 

CO  Editor  California  Bankers^  Magazine 


ILLUSTRATED  BY  GEOMETRICAL  DIAGRAMS 


(Jol'YRKiHT,  1892      .1.  W.  TkKAPWKI.L 


This  is  not  a  political  lecture,  because  the  (luestion  is  not  an 
American  question,  but  a  question  as  wide  as  the  world,  embracing 
all  people  ;  nor  is  it  a  debate  for  arguiiiL^  the  question,  but  it  is  sim- 
ply a  review  of  the  production  of  silver  in  the  past  eighteen  years, 
and  of  its  probable  production  in  the  next  twenty  years,  and  of  the 
present  position  of  such  nations  as  use  credit  paper.  If  a  survey 
were  to  be  taken  of  all  the  nations  of  the  earth,  then  the  subject 
would  be  too  vast  for  one  lecture.  Such  a  view  has  been  taken  as 
to  show  you  those  nations  who  are  guilty  of  using  credit  pa|x;r 
which  is  not  properly  backed  by  coin  (as  shown  in  the  diagram). 


Many  severe  truths  will  have  to  be  told,  but  simply  in  the  best 
interest  of  the  nations  concerned.  Any  person  wishing  to  dispute 
the  statements  made  can  write  to  the  California  Bankers'  Magazine 
where  the  lectiu'c  will  be  published.  The  diagram  shows,  on  a  geo- 
metrical scale,  the  relative  bulk  of  the  credit  paper,  and  the  sound 
bank  paper.  ■  The  size  of  a  twenty-dollar  gold  piece  is  given  with 
the  twenty  pieces  for  which  it  exchanges,  but  the  thirty  pieces  of 
silver  which  it  can  buy  (  equal  to  $30  )  are  also  shown. 

The  volume  of  silver  produced  by  the  world  in  1873  is  shown  as 
03,000,000  ounces,  and  the  volume  produced  in  1890  as  132,000,000. 

The  total  bulk  produced  in  those  eighteen  years  being  1,500,000- 
000  of  silver,  as  shown  ;  while  the  bulk  of  the  world's  probable 
production  from  now  to  1910  A.  D.  is  shown  as  a  volume  of 
3,000,000,000  at  the  same  ratio.  This  is  the  bulk  of  silver  for 
which  the  world  has  to  provide  a  use,  and  if  the  nations  have  found 
it  so  hard  to  deal  with  1,500,000,000  in  the  last  eighteen  years,  how 
will  they  deal  with  3,000,000,000  ounces  of  silver  in  the  next 
twenty  years  ? 

During  the  month  of  April  1892  repeated  finds  of  a  very  heavy 
value  have  been  made,  the  largest  and  most  valuable  being  at  the 
Broken  Hills,  in  Australia,  where  a  deposit  of  unknown  size  has 
been  found,  running  6,000  ounces  of  silver  to  the  ton,  besides  lumps 
of  pure  silver.  These  mines  have  already'  given  $22,000,000  silver 
in  two  years,  and  may  be  expected  to  give  20,000,000  a  year  to 
supply  all  India,  China  and  Japan. 

The  reasons  why  such  a  great,  steadily-growing  yield  of  silver 
has  arisen  are  : 

(1)  The  silver  is  found  in  three  wildernesses.  The  Rocky 
Mountain  chain  stretching  from  the  north  of  British  Columbia, 
down  through  Mexico,  and  in  the  Andes  from  Colombia  to  Tierra 
del  Fuego. 

(2)  In  the  interior  wilderness  of  Australia. 

(3)  In  the  newly-opened  center  of  Africa. 

(4)  The  people  of  the  United  States  did  not  find  the  silver  at 
first,  because  they  only  looked  for  it  in  the  shape  of  galena  or  lead  ore, 
70  per  cent,  lead,  and  about  to  of  one  ounce  silver  to  the  ton,  and  did 
not  know  that  the  richest  silver  ore  is  found  in  quite  difierent  shape, 
such  as  chloride  of  silver,  light  brown,  (  Here  are  samples  lent  to 
this  lecture  by  the  Academy  of  Sciences  )  sulphide  of  silver,  black. 


It  is  a  positive  fact  that  during  the  overland  imniigration  to  Cal- 
ifornia, in  tlie  forties  and  fifties,  tlie  wheels  of  the  i^ioucer's  wagons 
were  passing  along  over  the  finest  metal  ores  in  Colorado.  Had 
they  stopped  there,  instead  of  going  forward  to  die  in  the  wilderness, 
they  would  have  been  rich.  There  are  yet  1,000,000,000  acres  of 
wilderness,  to  be  searched  in  the  districts  alcove  named,  and  the 
wealth  of  sih-er  to  be  found  is  beyond  count. 

(5)  There  are  new  processes,  such  as  the  cyanide  process  and 
others,  by  which  gold  is  !iow  taken  out  of  various  kinds  of  ores,  this 
gold  was  lost  before;  and  no  doubt  the  scientific  men  will  repeat  that  in 
the  refining  of  silver  ores,  as  they  already  have  so  improved  their 
processes,  that  the  yield  of  silver  from  ore  is  getting  steadily  larger. 

(G)  The  spread  of  population  in  the  wildernesses  of  this  world  has 
increased  the  findings,  and  will  still  more  do  so.  *For  instance,  the 
enormous  colony  of  British  Columbia  (  stretching  from  49  degrees 
latitude  to  GO  degrees,  and  covering  meridians  from  115  degrees  west 
to  140  degrees,  larger  than  California,  Washington,  Oregon,  Idaho 
and  Nevada  )  is  destined  to  be  a  mighty  empire,  and  its  mountains 
(  when  settled  by  people  )  will  be  found  full  of  money  metals  for 
them. 

(7)  The  last  and  greatest  reason  is  the  new  means  of  cheap  car- 
riage by  electricity,  the  railways  of  the  19th  century'  are  already 
obsolete,  and  the  rivers  of  the  Rockies  turned  into  electricity  will 
carry  the  ores  to  market  in  single  carloads  more  cheaply  than  ever 
before,  on  light  and  cheap  roads  and  bridges. 

In  the  face  of  this  wonderful  bringing  forth  of  silver  from  the 
world.' s  wastes,  a  proposal  is  brought  before  the  nations  that  the 
United  vStates  shall  coin  silver  freel}'  for  all  the  world  at  50  per  cent, 
more  than  its  market  value,  that  is,  that  a  silver  dollar  co.sting  G5 
cents  (see  diagram)  i»hall  be  stamped  and  passed  at  100  cents  ;  also 
that  the  nations  of  the  earth  shall  be  invited  at  Chicago  to  do  the 
same.  Mr.  S.  Dana  Horton  has  even  gone  farther  and  has  proposed 
that  all  the  banks  in  the  world  shall  be  forced  to  u.se  silver  at  50  per 
cent,  more  than  its  market  value,  that  is,  bankers  are  to  be  forced  to 
give  129  cents  for  8G  cents'  worth  of  silver,  or  an  advance  of  4.')  cents 
per  ounce  upon  its  selling  price  today. 

This  proposal  was  even  submitted  in  the  American  Bankers  As.so- 
ciation,  and  is  strongly  pleaded  for  by  liini  in  a  book  of  his  called 
"  Silver  in  Europe,"  under  the  chapter  "  Parity  of  moneys."  When 
we  reflect  that  this  same  Profe.-sor  S.  Dana  Horton  has  been  .selected 
by   cur  U.    S.    Government  to   travel    through   all    the   nations  of 

3 


luiropc,  for  the  past  three  years,  in  order  to  push  into  their  notice 
the  above  piece  of  tyranny  upon  bankers,  surely  it  is  time  that  we 
began  to  ask  :  "  What  is  the  true  place  of  sihxr  in  the  circulation?" 
The  free  coinage  of  silver  at  50  per  cent,  more  than  its  market 
value  may  be  shown  to  be  folly  on  th.re^  grounds  : 

(1)  Free  coinage  without  the  lazv  cf  parity  (  parity  means  redemp- 
tion of  silver  in  gold)  has  been  tried  and  is  now  in  practice  in  India, 
and  in  Mexico,  and  China.  It  lowers  the  value  of  the  coins  to  bul- 
lion p  ice  at  once,  and  drives  gold  out  of  those  countries.  In  Indii 
the  silver  rupee,  formerly  worth  24  pence,  is  now  only  worth  15 
pence  ;  and  because  the  debts  of  India  are  due  to  foreigners  in  gold 
the  Hindoos  are  forced  to  pay  24  pence  in  gold  for  each  rupee  of 
debt,  that  is  a  premium  of  about  GO  per  cent,  on  all  the  principal  and 
interest  of  their  debt.  They  are  forced  to  take  silver  rupees  for 
their  crops,  and  so  lose  forty  per  cent,  of  the  value  of  all  their  pro- 
duce, while  that  also  lowers  the  price  paid  for  our  American  wheat  in 
the  central  market  in  England.  The  Hindoos  have  addressed  a 
remonstrance,  in  April  1892,  to  the  Imperial  Government  asking 
them  to  take  up  the  silver  question. 

In  Mexico  the  silver  dollar  only  buys  its  bullion  value,  and  all 
prices  and  wages  are  lower  than  in  the  United  States,  see  the  excel- 
lent articles  by  the  Mexican  Minister  in  that  admirable  magazine  the 
North  American  Review.  In  China  the  Government  mints  stamp 
bars  of  silver,  from  which  the  buyer  of  goods  cuts  off  a  piece 
by  the  Haikwan  (customs)  tael  weight,  which  piece  passes  for 
goods  at  its  daily  bullion  value.  This  is  the  same  in  effect  as  free 
coinage  without  the  law  of  parity. 

As  manj'-  of  the  contracts  in  the  United  States  of  America  are 
silver  contracts,  it  follows  that  because  the  passing  of  an  open  free 
coinage  law  would  drive  down  the  value  of  silver  to  market  price, 
therefore  such  a  law  would  be  declared  void  by  the  U.  S.  Supreme 
Court  on  the  ground  that  it  impaired  the  obligation  of  existing  con- 
tracts, and  so  was  unconstitutional. 

2.  Free  coinage  of  silver  with  the  law  of  parity  has  nowhere  been 
tried,  because  if  it  were  tried  it  stands  to  reason  that  everj'  body 
who  had  silver  would  at  once  exchange  it  for  gold,  and  that  all  the 
silver  in  the  world  would  come  to  the  United  States  of  America, 
even  the  Hindoos  would  gladly  sell  their  15  pence  rupees  of  silver 
for '24  penny  gold  rupees,  and  put  an  end  to  their  troubles,  but 
where  could  the  gold  be  got  to  redeem  all  the  silver  in  the  world  ? 
That  is  the  problem. 

4 


In  the  states  of  the  Latin  Union,  where  silver  is  legal  tender, 
the  moment  that  silver  fell  below  par,  the  free  coinage  of  silver  was 
forced  to  stop.  The  notes  of  the  Bank  of  France  are  silver  notes, 
payable  in  silver,  and  only  paid  in  gold  at  the  option  of  the  bank, 
and  then  at  a  premium  of  2]4  per  thousand.  It  is  that  fact  which 
forces  the  silver  into  circulation  in  France,  because  people  must  use 
silver,  whether  they  like  it  or  not ;  at  the  same  time  the  forcing  out 
of  the  silver  by  that  great  bank  causes  the  gold  stock  to  be  always 
increasing,  because  the  use  of  silver  gains  the  gold.  The  Bank  of 
France  is  even  able  to  take  and  hold  500,000,000  francs  of  other 
Latin  L'f^nion  silver,  because  the  other  members  of  the  Latin  Union 
use  legal  tender  pnper,  and  so  drive  their  own  silver  out  of  their 
own  countries,  having  replaced  it  with  fiat  paper,  or  credit. 

3.  Free  coinage  of  silver,  if  enforced  by  legal  tender,  would  be 
declared  unconstitutional  also,  becau.se  it  is  against  Article  I, 
Clause  10,  of  the  Constitution,  which  forbids  the  impairing  of  con- 
tracts. If  free  coinage  with  or  without  the  law  of  parity  be  impossi- 
b.e,  liow  then  can  we  use  silver  at  all  ?  Before  answering  that 
question,  we  must  first  ask  another  ;  Is  there  any  cause  for  the  fall 
of  silver  other  than  over  production  ? 

Yes  !     There  are  four  great  causes,  which  are  : 

(1)  The  use  of  false  credit  paper  by  many  nations. 

(2)  The  paternal  system  of  political  baiiking. 

(3)  The  abandonment  of  silver  by  European  politicians. 

(4)  The  utter  absence  of  all  control  by  the  bankers. 

These  statements  of  fact  refer  to  all  the  nations  of  the  world,  not 
to  the  United  States  alone,  and  you  will  please  to  so  read  them. 
They  will  be  proved  by  the  diagram  attached,  which  shows  at  a 
glance  who  are  the  nations  guilty  of  using  credit  paper. 

The  first  statement  proved  b}'  the  diagram  is  :  "  The  use  of  false 
paper  by  many  nations,"  and  in  the  consideration  of  the  immense 
volume  of  about  3, GOO  millions  of  credit  paper,  it  is  as  well  to  begin 
with  the  smallest  of  the  issues,  and  to  rise  steadily  to  the  largest 
user  of  paper,  that  is,  the  United  vStates  of  America. 

The  leading  example  of  credit  paper,   which  has   had   such  a 

power  to  make  other  nations  follow  in  its  track,  is  the  Bank  of  I'jig- 

land.     It  may  seem  to  some  minds  an  invidious  thing  to  attack  the 

financial  laws  upon   which    llie   Bank  of  l-'ngland  is  founded,  but 

banking  truth  is  the  one  thing  that  we  are  here  to  find,  no  matter 

what  the  cost  may  be. 

5 


'i'hc  Bank  of  Ivngland  is  fouiided  upon  credit  paper  instead  of 
upon  tangible  .securities,  or  upon  convertible  assets.  A  bargain  was 
made  between  the  Bank  and  the  British  Government,  that  in  con- 
sideration of  the  Bank  lending  /:iG,450,000  ($83,000,000)  to  the 
British  Government,  at  3  per  cent,  interest,  the  bank  should  receive 
the  privilege  of  issuing  notes  upon  nothing  but  credit.  There  was 
no  banking  necessity  for  any  such  arrangement.  It  would  have 
been  better  and  safer  if  the  Bank  of  lingland  had  taken  the 
$83,000,000  in  gold,  and  had  lent  it  to  bankers  only  on  securities 
deposited,  thus  gaining  a  live  two-fold  security  (viz.,  that  of  the 
borrowing  bank,  and  that  of  the  tangible  securities  deposited), 
instead  of  burying  all  that  gold  in  a  public  debt,  and  taxing  the 
people  of  Kngland  3  per  cent,  per  annum,  in  order  to  pay  interest  on 
the  gold  spent  by  the  government. 

There  would  also  be  this  verj^  great  difference,  that  the 
$83,000,000  of  gold  would  be  continually  used  b)^  all  the  bankers 
of  London  to  promote  trade  and  industrj',  instead  of  being  abso- 
lutely KO  where;  at  all,  having  been  spent  by  the  government, 
which  owes  now  $3,500,000,000,  while  the  gross  amoimt  of  the 
annual  value  of  property  and  profits  assessed  for  income  tax  is  only 
$3,100,000,000,  or  $400,000,000  less  than  its  debt.  The  practical 
value  of  this  great  national  credit  was  tested  the  other  daj^,  when  in 
the  Baring  failure  it  became  necessarj^  to  get  at  once  $25,000,000  in 
gold  in  order  to  keep  the  Bank's  gold  reser\'e  to  its  legal  height. 
The  whole  power  and  wealth  of  the  British  Empire  of  360,000,000 
souls  were  not  able  to  furnish  that  gold  when  it  was  wanted  ;  but 
England  was  forced  to  go  to  France  and  to  Russia  for  the  mone}'. 
What  was  the  worth  to  the  Bank  of  England  of  that  great  debt  of 
$83,000,000  due  by  the  British  Government?  In  gold,  absohitely 
nothing  at  all!  Whereas,  if  that  gold  were  loaned  on  tangible 
securities,  as  explained,  there  would  be  a  visible  and  realizable  value 
in  hand. 

The  Bank  of  England  then  is  founded  on  false  financial  laws, 
and  should  be  chartered  upon  a  wiser  and  safer  basis.  But  observe 
the  world  wide  effect  of  the  bad  example  of  founding  notes  upon  a 
debt,  and  issuing  credit  paper. 

The  nations  one  after  another  were  led  bj^  the  politicians  to 
believe  that  there  was  nothing  equal  to  the  s5-stem  of  the  Bank  oi 
England,  and  they  set  to  work  to  see  how  they  could  cop}^  it  and 
improve  upon  it.     Sturdy  Holland,  generally  called   Netherlands, 

G 


issued  $7,500,000  credit  paper  straight,    and  following  the  diagram, 
we  make  this  list. 

Credit  Paper.  I'opulation. 

India fS,000,000  1'1'(),000,000 

Netherlands 7,o(t(),000  4.500,000 

Canada 10,000,000  5,000,000 

Greece 2-5,000,000  2,200,000 

Japan SO,C30,000  39,0(X),000 

Turkey 30,000,000  22,000,000 

South  Am.,  Chili,  (27);  Col.  (4);  Bol.  (12)  40,000,000  8,000,00(J 

Belgium   80,000,000  t),000,000 

German  ICmpire,  R.  K.  vS oO,000,000  40,000,000 

Brazil 100,000,000  14,000,000 

Italy,  (70-125) 105,000,0110  40,500,000 

Austria-Hungary o.S5,000,000  40,000,000 

Argentine 800,000,000  4,000,000 

Russia 040,000,000  ll;'.,000,000 

$2,758,O0O,(J00 
United  States 1,000,000,0;)0  04,000,000 

f3, 758, 000,000 

Time  will  not  allow  a  history  and  analysis  of  each  of  these  items, 
but  a  few  instances  will  suffice  to  show  the  folly,  from  a  banking 
point  of  view,  of  these  credit  papers.  In  the  earlier  part  of  this 
lecture  India  was  seen  as  very  sorely  troubled  with  $900,000,000 
bad  silver,  by  the  fall  in  the  value  of  silver,  making  a  loss  of  60  per 
cent,  in  the  payment  of  yearly  tribute  and  interest  to  ICurope.  Vet 
by  the  issuing  of  credit  paper,  $8,000,000,  (for  which  there  is  no 
necessity  whatever),  the  Indian  Government  displaces  that  amount 
of  silver  with  paper,  and  so  helps  to  create  the  verj-  financial  disease 
under  which  she  suffers. 

The  proposition  which  is  to  be  proved  is:  "That  the  use  of 
credit  paper  by  the  nations  drives  silver  out  and  destroys  its  value." 

Then  take  the  little  countr>'  of  Greece,  just  struggling  into  exist- 
ence with  a  population  of  2,200,000  onlj^,  the  public  debt  is 
$125,000,000,  and  is  due  in  gold,  so  that  in  order  to  remit  the 
in.erest,  it  becomes  necessary  to  buy  gold  at  a  very  heav>-  discount, 
giving  D  200  for  D  100. 

Thus,  by  discrediting  silver,  Greece  has  to  pay  a  hcav}-  tax 
yearly,  but  if  she  taxed  herself,  once  for  all,  to  redeem  the  credit 
paper,  the  Greeks  could  have  a  bank  on  the  principle  of  the  Bank  of 
France,  and  by  using  silver  would  at  once  raise  paper  to  par. 

Take  Turkey,  where  $.".0,000,000  of  credit  paper  was  issued, 
and  in  the  impccimious  state  of  the  Turkish  Treasury  liic  paper  was 


simply  abniuloned  to  the  holders ;  that  is,  those  who  were  foolish 
enough  to  take  it,  were  robbed  to  tliat  anount,  just  as  has  already  hap- 
pened in  the  United  Stated  in  early  days  with  the  Continental  notes, 
when  5is20O,O0O,O0O  were  stolen  from  the  people  by  the  politicians. 

In  the  case  of  Belgium,  which  has  a  population  of  G, 000, 000, 
they  hold  only  $21,000,000  against  an  issue  of  $107,000,000,  and  by 
such  an  over  issue  have  driven  320,000,000  francs  of  their  own  silver 
out  of  circulation,  and  200  millions  of  this  silver  is  now  in  the  Bank 
of  France  waiting  to  find  a  purchaser,  and  causing  a  depreciation  of 
the  whole  volume  of  silver  in  both  Belgium  and  in  France  and  in 
the  world,  while  if  a  war  arose  between  Germany  and  France,  and 
the  theatre  of  war  should  shift  to  Belgium,  then  her  $86,000,000  of 
credit  paper,  would  show  their  worthlessness,  and  to  the  ruin  of  wai 
would  be  added  commercial  and  industrial  destruction. 

Brazil  is  another  instance  of  a  country,  which  produces  a  large 
amount  of  gold  3'early,  yet  all  that  gold  is  driven  out  of  the  country 
by  a  false  paper  issue  of  $100,000,000,  which  is  the  cause  of  endless 
poverty  and  distress  to  the  people  of  the  country,  while  if  they  used 
their  own  gold  as  a  currenc}',  or  to  buy  silver  in  order  to  back  their 
paper  through  a  properly  founded  bank,  the  profit  would  arise  not 
only  in  the  use  of  the  silver,  but  in  the  raising  of  all  the  money  to 
par,  and  so  making  great  savings  at  the  exchanges. 

The  other  South  American  countries  w^hich  discredit  silver  are  all 
silver-producing  countries,  and  they  do  their  utmost  to  debase  the 
value  of  their  own  produce  by  using  credit  paper.  Thus  Bolivia 
has  produced  30  millions  of  silver  in  three  years,  and  complains  that 
all  that  silver  leaves  the  country,  though  the  cause  is  plain  enough 
in  the  $5,000,000  of  false  credit  paper  which  is  thrust  upon  the  peo- 
ple as  legal  tender. 

Colombia,  which  is  a  heav}-  producer  of  gold  and  of  silver,  has 
forced  legal  paper  of  $12,000,000  circulating  at  a  discount  of  50  per 
cent.,  which  really  causes  them  to  paj'  double  interest  and  double 
the  amount  of  the  debt,  while  the  driving  out  of  the  silver  produced 
in  the  country  causes  a  dead  loss  to  the  miners  of  half  the  value  of 
their  labor. 

Chili,  a  silver-producing  countrj-  to  a  very  large  amount,  has  also 
issued  $23,000,000  of  credit  paper,  which  displaces  silver  from  the 
circulation,  is  an  element  of  weakness,  and  kills  the  product  of  the 
silver  mines.  "\'enezuela  follou's  the  same  plan,  with  the  same 
results  in  a  small  way. 

These  countries  are  only  the  little  .^^inuers,  we  must  now  tuni  to  the 

S 


greater  countries.  Italy,  troubled  with  repeated  deficits,  (through  the 
ambition  of  her  politicians)  helps  to  increase  her  own  deficits,  and  to 
further  impoverish  her  people  by  an  issue  of  $70,000,000  credit 
paper,  and  $125,000,000  of  surplus  bad  issue  through  the  banks. 
The  effect  has  been  to  drive  her  silver  five  franc  pieces  out  of  Italy 
into  France.  Although  bound  to  redeem  that  silver  in  gold  by  the 
Latin  Union,  yet  Itah'  is  unable  to  fulfill  her  contract. 

Austria- Hungar}'  has  issued  $385,000,000  of  forced  paper,  and 
instead  of  copying  France  bj^  founding  a  silver  note,  is  discrediting 
silver  by  proposing  to  sell  it  and  to  go  upon  a  gold  basis,  the  prod- 
uce of  her  own  mines  being  about  $7,000,000  in  three  years, 
and  the  loss  thus  falling  upon  the  unfortunate  people  in  three  waj'S  : 

(1)  The  depreciated  paper  florins. 

(2)  The  cost  of  the  new  loan  in  order  to  buy  the  gold  needed. 

(3)  The  permanent  loss  of  revenue  to  the  silver  miners,  and  to 
all  commerce. 

Argentine  is  the  greatest  of  all  the  enemies  of  silver,  although 
also  a  producer  of  the  metal.  Paper  debt  has  been  issued  on  the 
land  to  the  value  of  $534,000,000,  and  a  large  issue  of  credit  paper, 
based  upon  paper  bonds  and  not  redeemable  in  gold,  has  been 
issued  to  the  unfortunate  people  to  the  amount  of  $380,000,000. 
The  whole  population  only  number  4,000,000,  and  it  is  quite  hope- 
less to  think  that  they  can  ever  redeem  about  $1,000,000,000  of 
debt.  The  purchase  of  a  large  piece  of  territory  by  the  Jews,  and 
its  colonization  under  Baron  Hirsch,  will  probably  lead  to  a  new 
monetary  system  being  adopted  eventually.  The  house  of  Barings 
were  criminally  responsible  for  assisting  to  create  such  a  load  of 
debt  to  foreigners  upon  the  shoulders  of  a  poor  people  robbed  by 
politicians. 

The  effect  of  raising  silver  to  par  would  be  to  help  their  mines, 
and  if  (as  was  reported)  they  have  bought  silver  to  liack  their  notes, 
that  would  be  the  road  toward  redemption.  It  would  need  very 
heavy  taxation  to  supply  enough  silver  to  pay  their  liabilities,  but  a 
great  increase  of  population  would  lighten  that  taxation,  and  sales 
of  the  lands  to  the  new  .settlers  would  also  form  a  redemption  fund. 

Russia  is  the  next  upon  the  list  with  $940,000,000  of  legal  tender 
paper,  which,  like  the  U.  S.  greenbacks,  is  forbidden  to  be  redeemed 
by  law,  and  which  could  not  be  redeemed  if  desired,  and  the  Czar 
has  just  ordered  100  millions  more  to  be  i.ssued.  The  notes,  of 
course,  are  utterly  useless  outside  of  Russia  except  at  a  very  heavy 
discount,  and  in  Russia  itself  they  only  pa.ss  at  60  per  cent,  of  their 

9 


face  value,  .so  that  a  roulile's  \v(jrUi  (-f  work  (july  Ijuys  al)out  Iialf  its 
value  of  bread.  These  paper  roubles  are  the  counterpart  of  our 
American  Continental  currency,  and  will  most  probabl}'-  share  the 
same  fate:  viz.,  repudiation  and  robbery.  How  do  the  Russians 
keep  their  loans  afloat  in  foreign  countries?  Just  as  our  U.  S. 
Treasury  does,  that  is  '^'' by  manipidating  a  central  gold  balance.'''' 
Thus  the  wretched  people  are  forbidden  to  bring  silver  or  paper 
roubles  to  the  Treasury,  and  they  have  to  buy  gold  at  a  heavy  pre- 
mium to  pay  taxes.  The  gold  mines  belong  to  the  Czar,  and  their  pro- 
duce is  hidden  from  public  knowledge.  The  Czar  raises  gold  loans 
in  Europe  and  converts  them  when  they  become  due,  leaving  large 
gold  balances  in  the  banks  of  the  capitals  of  Europe  to  liquidate  the 
interest.  It  was  in  that  way  that  the  Bank  of  England  was  enabled 
to  borrow  gold  from  Russia  by  being  allowed  the  use  of  some  of 
Russia's  borrowed  gold  for  a  few  months.  It  was  reported  in  the 
papers  that  Alphonse  de  Rothschild,  in  Paris,  had  his  vaults  full  of 
millions  of  Russian  bonds.  If  so,  he  is  very  unwise,  for  let  us  imagine 
that  the  misery  and  nihilism,  which  are  the  result  of  legal  tender, 
debased  paper,  should  so  far  succeed  in  revolt  as  to  kill  the  imperial 
family  in  a  day  and  deliver  the  Imperial  Bank  of  Russia  (which  is 
only  a  name  for  the  Imperial  Treasury)  to  the  people;  then,  when 
the  $209,000,000  of  the  central  gold  balance  are  gone,  and  the  coun- 
try has  nothing  but  1,000  millions  of  legal  tender  paper,  what  sort 
of  a  revolution  would  arise  ?  Bonds,  loans,  paper,  people  involved 
in  one  common  anarchy  would  sweep  all  civilization  to  destruction. 
Russia  has  absolutely  no  money  at  all,  and  Alphonse  de  Rothschild 
w^ould  soon  find  it  out  to  his  lasting  sorrow\  Argentine  was  bad 
enough.     Russia  will  be  worse. 

The  German  Empire  is  not  without  fault.  The  Reich  has  been 
guilty  of  issuing  $30,000,000  of  faith  and  credit  paper,  legal  tender, 
called  Reichs  Kassen  Scheine.  There  is  no  necessity  for  it,  it  dis- 
places just  that  volume  of  silver,  and  so  helps  to  drive  down  the 
price  of  the  thaler  and  the  mark,  and  to  punish  the  Germans.  The 
sooner  they  repent  of  their  folly,  tax  themselves,  and  pay  it  in  silver, 
the  better. 

So  we  have  pas.sed  through  $2,4:58,000,000  of  false  paper,  and 
before  entering  ovir  own  country-,  the  United  States  of  America,  it 
will  be  well  to  ask  a  few  plain  questions. 

First.  Of  what  use  would  it  be  for  all  these  wretched  nations  to 
try  to  back  that  paper  with  gold  ? 

The  problem  is  :  "Wanted,  $2,000,000,000  gold  at  once,"  where 

10 


is  it  ?  How  long  will  it  take  to  mine  it  ?  Yet  the  politicians  in  all 
these  European  lands,  forgetting  all  the  results  of  their  past  stupid- 
ity, utterly  ignorant  of  all  the  laws  of  finance  or  banking,  propose  to 
enter  upon  a  fight  for  the  world's  gold.  I^ed  into  the  snare  by  Eng- 
land, the  voices  echo  across  the  world  from  Eondon,  as  from  Rome, 
from  Amsterdam  or  Brussels,  from  Wieu  or  Buda  Pesth,  as  from  Ber- 
lin or  Athens,  "  Eet  us  buy  gold  ?  "  Suppose  they  bought  the  gold, 
where  would  they  get  the  cash  to  pa)' for  that  2,000  millions  ?  It 
must  be  bought  with  taxes. 

It  is  not  so  much  the  lack  of  gold  as  the  superabundance  of 
debased  paper  that  is  the  disease,  and  in  any  case  much  of  that  must 
be  extinguished  forever.  Paper  that  has  not  got  behind  it  coin  or 
visible  assets,  realizable  in  coin,  is  only  a  printed  lie.  That  is  why 
the  $83,000,000  of  Bank  of  England  notes  is  really  a  false  legal  ten- 
der currency,  and  the  first  cause  of  all  this  trouble  in  the  world. 

The  second  question  is  "  Of  what  use  would  it  be  to  give  to  each 
of  these  nations  the  privilege  of  free  coinage  at  a  false  value  of  all 
the  silver,  which  private  individuals  might  offer  to  the  mint?" 
Foreigners  could  then  bring,  to  the  mints,  silver  bought  at  65  cents 
on  the  dollar,  and  receive  it  again  from  the  mint  stamped  as  worth 
100  cents,  and  so  plunder  the  unfortunate  people  of  50  per  cent, 
profit  upon  all  the  silver  so  treated.  \Vhat  would  happen  to  the 
silver?  It  also,  as  it  has  already  been  in  Italy,  Belgium,  Greece, 
etc.,  would  be  driven  out  of  each  country  by  the  legal  tender 
paper  under  the  Gresham  Law.  So  the  evil  would  be  worse  than 
before,  because  the  people,  after  being  robbed  by  foreigners  of  50  per 
cent,  value  in  the  silver,  would  be  left  with  the  legal  tender  paper 
on  hand,  poorer  still  than  before. 

The  whole  of  the  robber>',  which  goes  on  ever}-  day  through  this 
debased  paper,  is  chargeable  to  the  fact  that  the  politicians  have 
appropriated  the  business  of  the  bankers.  What  do  the  people  know 
of  the  mysteries  of  finance  ?  Are  our  representatives  in  Congress 
better  informed  ?  If  so,  why  have  the  above  facts  not  been  shown 
forth  ?     I  am  the  first  man  to  do  it. 

Turn  to  a  banking  countr>-  now,  where  these  great  truths  are  put 
into  practice.  France,  the  silver  country  of  the  world,  although  .she 
produces  no  .silver  to  .speak  of  (?'.  e.  onlj-  about  $.3,000,000  jx^r 
year)  )'et  by  good  banking,  she  is  able  to  ukc  a  bank  note,  which  is 
nothing  but  a  silver  note,  payable  onh'  in  silver,  ani  by  using  that 
silver  note  she  .steadil)-  gains  gold  all  the  time. 

11 


Cast  your  eye  l);ick\var<l  tliroiigh  lliis  dying  Nineteenth  Age  (,f 
Christ.  In  ISO.']  you  sec  Napoleon  the  dreat,  founding  the  liank  of 
France,  and  she  shines  through  his  prosperity,  when  he  returns  with 
liis  l)rokcu  legions  from  Moscow,  and  thence  passes  to  the  ruin  of 
J'^lba,  the  I^ank  of  France  lives  on.  The  Bourbons  cross  her  track, 
and  Waterloo  crashes  past  ;  she  passes  on  thrf>ugh  all,  and  through 
the  Orleani.st  regime  too;  she  goes  through  the  change  into  a  republic, 
and  survives  the  Coup  d'Etat,  and  even  the  lyittle  Napoleon.  Sedan, 
and  the  German  indenniity  of  $1,000,000,000  roll  over  her  head,  as 
also  docs  the  Conunune,  and  still  the  liank  of  France  keeps  on, 
while  at  the  close  of  this  passing  Age  see  how  her  position  contrasts 
with  that  of  the  British  Fmpire. 

In  the  Indian  empire  they  have  free  coinage  there  of  $900,000,000 
of  silver  rupees,  which  circulate  at  a  discount  of  $400,000,000,  repre- 
senting therefore  only  a  value  of  $500,000,000  in  actual  purchasing 
power,  because  there  is  no  central  bank  to  make  the  circulation  fit 
into  gold  values. 

In  France,  without  free  coinage  of  silver,  there  are  $700,000,000 
of  silver  in  circulation,  which  circulates  at  its  full  value,  because  b}' 
the  banking  power  of  the  Bank  of  France,  with  its  258  banking 
places,  this  silver  is  always  convertible  into  gold  at  2^2  per  thousand 
(Moxon  p.  50),  although  its  face  value  shows  a  discount  at  market 
price  of  one  third,  or  $235,000,000.  Such  is  the  immense  power  of 
.sound  banking,  and  of  a  sound  note  issue,  based  on  silver,  paj^ablc 
in  silver,  and  so  forcing  the  silver  into  circulation. 

While  in  India,  W'ith  free  coinage  of  silver,  enormous  losses  have 
to  be  made  in  order  to  purchase  gold  with  debased  silver  for  remit- 
tance abroad,  because  there  is  no  central  bank,  embracing  the  whole 
land  in  its  arms,  and  keeping  silver  up  to  par ;  in  France  no  losses 
arise,  and  she,  who  has  no  free  coinage  of  silver,  and  no  silver  cor- 
ner like  the  United  States  of  America,  is  the  only  friend  of  silver  in 
the  world,  and  the  onl}-  countrj^  which  keeps  silver  at  par  and  in 
circulation. 

What  is  the  only  lawful  judgment  to  be  drawn  from  these  two 
cases,  where  such  utterly  opposite  law^s  and  such  utterly  opposite 
results  prevail  ?  Is  it  not  that  free  coinage  is  follj- ;  that  all  man- 
kind should  abolish  the  system  of  political  banking,  and  should 
establish  in  each  land  a  system  of  banking  which  will  surely  bring 
forth  such  work  as  that  bf  the  Bank  of  France,  and  so  will  bring 
silver  back  to  its  old  place,  and  to  the  value  that  it  had  in  olden 
times  ? 

12 


That  free  coinage  of  silver  is  an  utter  failure  and  brings  ruin  in 
its  train  is  seen  in  India.  That  true  banking,  without  free  coinage 
of  silver,  can  make  and  keep  a  nation  prosperous,  hold  silver  at  par, 
and  even  pay  a  Genuan  war  indemnity  without  trouble  is  seen  in 
France.     That  is  the  lesson  of  this  Nineteenth  Centur}'. 

Now  let  us  turn  to  the  worst  enemy  of  silver  in  the  world,  that 
is,  the  United  States  of  America ;  the  greatest  example  of  the 
''paternal  system  of  political  banking.''' 

First.  I  stand  right  here  upon  the  constitution  ot  the  United 
States ;  and  I  declare,  with  Justice  Field  of  the  Supreme  Court,  that 
the  issue  of  $346,000,000  of  legal  tender  paper  is  a  breach  of  all  our 
liberties ;  because  under  the  Constitution  the  United  States  has 
no  power  to  emit  bills  of  credit,  but  only  ' '  to  coin  money  and  to 
regulate  the  value  thereof,"  (that  is  value  of  coin).  Congress  has 
no  power  to  regulate  the  value  of  paper  so  as  to  make  it  legal  tender, 
but  only  to  regulate  all  the  value  of  the  money  coined.  It  is  true 
that  in  the  comment  (p.  G)  upon  the  Constitution,  the  following 
words  are  added,  as  from  the  case  of  Lick  7'^.  Faulkner,  25  Cal.,  40-4  : 
"  The  United  States  Constitution  confers  upon  Congress  the  power 
"  to  issue  Treasury'  notes,  or  bills  of  credit,  not  in  express  terms,  but 
"  as  a  power  necessarily  implied,  and  also  to  make  such  notes  or  bills 
"  a  legal  tender  in  payment  of  debts." 

The  word  imply,  a  Latin  word,  means  to  fill  in  or  to  tzcist  in,  and 
if  lawj'ers  are  going  to  exercise  their  infenial  arts  to  twist  powers  into 
Congress,  that  are  not  conferred  in  express  ter?ns  by  the  Constitu- 
tion ;  then  F'arewell  Libert}' !      Welcome  tyranny  and  destruction  ! 

Hon.  Jno.  Jay  Knox  says,  {V .  S.  Notes,  p.  10):  "At  theclo.se 
"  of  the  war  with  Great  Britain  the  minds  of  all  classes  were  imbued 
"with  a  wholesome  antipathy  to  paper  money,  and  as  a  consequence, 
"when  the  Federal  Constitution  was  under  consideration^  the  jwwer 
"to  emit  bills,  (which,  in  the  original  draft  was  given  to  the  I'niled 
"vStates),  was  stricken  out." 

Clause  10,  Art.  1,  forbids  the  individual  states  to  emit  "  bills  of 
"  credit,  or  to  make  an^-thing  Init  gold  and  silver  coin  legal  tender 
"  in  payment  of  debts,  or  to  inij^air  the  obligation  of  contracts." 

If  this  clause  had  been  strictly  followed,  then  the  States  would 
have  been  forbidden  to  do  by  their  deputies,  the  .state  banks,  tho.se 
things  (viz  :  tlic  issue  of  wild  cat  state  notes)  which  they  are  not 
allowed  h\  the  Constitution  to  do  tliemselves.  Then  all  these  rob- 
beries of  hundreds  of  millions,  taken  by  the  wild  cat  and  red  dog 
note  issues  of  the  .state  banks  from  the  people  of  the  United  States, 
would  have  been  prc\-cnted 

13 


The  liistory  of  paper  money  in  the  Ilnitetl  vStates  is  too  long 
a  snbject  for  this  lecture  ;  but  before  the  present  Constitution  was 
adopted  in  17.S7,  the  Continental  Congress  in  1775  had  already  forced 
the  issue  of  $242,000,000  bills  of  credit,  called  Continental  notes, 
which  ended  in  a  robbery  of  the  people  of  ,$190,000,000  (see  J.  J. 
Knox,  p.  10),  and  the  terrible  ruin  and  loss  brought  upon  the  people 
by  these  notes,  caused  the  founders  of  the  Constitution  in  the 
twelfth  year  of  the  independence  of  America  to  forbid  credit  paper. 
That  sin  has  been  stereotyped  into  our  life.  If  a  man  despises  any- 
thing, he  says  "  it  is  not  worth  a  continental." 

Second. — The  rule  of  construction  for  the  United  States  Constitu- 
tion is  found  in  Amendment  X,  thus  : 

"The  powers -not  delegated  to  the  United  States  by  the  Consti- 
*'  tution,  nor  prohibited  by  the  Constitution  to  the  States  are  reserved 
"  to  the  States,  or  to  the  people." 

Now  as  the  power  to  emit  bills  of  credit  was  not  delegated 
to  the  Congress  by  the  Constitution,  but  only  the  power  to  coin 
metal  and  to  regulate  metal  values,  it  follows  that  all  legal  tender 
paper  is  illegal,  unless  the  people  amend  to  allow  it. 

Leaving  the  law  and  turning  to  history,  what  do  we  find  ?  That 
the  issue  of  the  greenbacks  robbed  the  soldiers  in  the  field  of  two 
thirds  of  their  pay.  Yes,  indeed,  those  verj-  greenbacks  that  we  ar& 
passing  from  hand  to  hand  today  have  done  this  dirty  work  ;  more 
still,  they  have  ruined  hundreds  by  their  fluctuations,  and  hundreds 
have  made  fortunes  by  gambling  in  the  paper  bills,  and  in  the  gold 
premium  which  they  caused. 

All  these  crimes  and  robberies  are  laid  at  the  doors  of  the  bankers 
b}'  ignorant  persons,  who  do  not  understand  that  it  was  the  poli^ 
ticians,  who  by  stealing  the  duties  and  privileges  of  bankers,  under- 
took to  issue  sham  bank  notes  without  coin  backing. 

Ever}'  bank  note  has  its  whole  value  at  its  back,  one  part  in 
coin,  and  the  rest  in  visible  and  realizable  securities.  If  it  be  not 
so  provided,  it  is  a  .sham  bank  note.  Most  of  these  issues  of  the 
United  States  are  sham  bank  notes,  which  no  bank  would  dare  to 
issue,  because  the}-  have  not  their  whole  value  behind  them  in  coio 
and  in  assets. 

There  are  eight  kinds  of  paper  now  floating  in  the  United  States, 
as  shown  in  the  diagram,  and  it  is  easy  to  prove  that  this  credit 
paper  is  the  real  cause  for  the  depreciation  of  silver. 

(1)  Gold  certificates,  $178,000,000.  These  are  Treasury- receipts 
for  gold,  exempt  from  taxation,  and  consist  of  the  last  gold  reserves 


14 


of  the  bankers,  they  are  legal  tender  to  the  customs,  but  they  are 
not  legal  tcfidcr  bet\veen  citizens,  they  are  used  illegally,  that  is 
without  an}'  lawful  authority,  hy  the  national  banks  as  lawful 
reser\'es  (see  Treasurer  Upton,  p.  264). 

Bankers  are  partly  driven  to  use  these  by  the  monstrous  system 
of  taxing  the  cash  in  the  banks  for  State  purposes,  instead  of  taxing 
the  income  of  the  banks  only  ;  in  a  right  system  of  taxation  and  of 
banking  the}-  would  not  need  them  at  all,  but  would  use  the  gold 
reserve  system  of  the  Bank  of  England  which  is  better. 

(2)  Currency  certificates,  $31,000,000.  These  are  created 
tinder  the  Act,  8  June  1873,  and  are  Treasury  receipts  .for  deposited 
greenbacks  of  small  denominations  (Upton  262),  they  are  used  r.t 
the  clearing  house  in  payment  of  balances.  They  are  full  legal 
tender. 

(3)  Silver  certificates.  These  are  Treasury  deposit  receipts  for 
silver  dollars,  $330,000,000,  they  are  legal  tender  to  the  United 
States  of  America,  but  are  not  legal  tender  between  citizens.  The 
dollars  have  fallen  to  $220,000,000  in  value. 

(4)  Treasury  notes  of  July  14,  1800,  $95,000,000.  These  aie 
warehouse  receipts  for  the  bullion  in  the  silver  corner  at  Washington, 
and  are  an  original  invention  of  John  Sherman,  differing  from  all 
paper  in  the  world,  because,  though  based  upon  silver,  they  are  paya- 
ble in  gold,  and  they  are  gaining  at  the  rate  of  $4,500,000  paper  per 
month.  TliC}'  will  soon  be  the  overmastering  element  in  the  Treas- 
ury, because  they  are  legal  tender  for  all  public  and  private  dues. 

(5)  Greenbacks,  or  United  States  notes,  $346,000,000.  These 
are  the  legal  tender  paper  notes  iipon  which  the  great  decision  of  the 
Supreme  Court,  referred  to  above,  was  given,  and  from  which,  with 
Justice  Stephen  J.  Field,  I  take  the  freedom  to  dissent  on  the 
grounds  already  given.  They  were  issued  in  the  war,  and  are  said 
to  be  a  full  legal  tender  for  all  debts,  public  and  private.  The 
Treasurer  is  forbidden  by  law  to  redeem  any  of  tlie.se  notes,  and  is 
ordered  to  pay  them  out  as  fast  as  he  receives  them,  and  to  replace 
all  woni  notes  with  new  notes  of  the  same  denominations. 

(6)  National  banknotes,  $173,000,000.  These  are  notes  based 
upon  paper  bonds,  deposited  with  the  Comptroller  of  Currency,  and 
are  legal  tender  between  citize::s  but  are  vol  legal  tender  to  tlic 
customs. 

(7)  Old  .state  bank  notes,  $100,000.  Out  of  the  wreck  of  the 
state  wildcat  banks  and  red  dog  banks  there  still  remain  sor.ie 
notes  outstanding  unpaid,  but  these  it  is  needless  to  say  are  iiot  legal 

in 


Icii'ler  to  anybody.  The  i^amblers  in  banking  (after  wrecking  their 
banks)  conkl  buy  up  their  own  notes  by  the  sackful  and  escape 
punishment  for  their  crimes,  such  is  the  history  of  our  credit  paper 
iu  the  United  States  of  America. 

(8)  Fractional  currency,  $7,000,000.  That  is  all  that  is  out- 
standing of  the  paper  issued  to  replace  subsidiary  silver,  another  of 
those  insane  experiments  in  banking  with  credit  paper  which 
brought  loss  to  the  United  States  of  America. 

(9)  The  specific  contract  law,  $1,840,000,000.  No  statistics  can 
be  compiled  of  this  private  currency  which  overrides  and  expels  all 
the  currencies  of  the  United  States  of  America,  and  demands  that, 
whatever  the  money  used  by  law  may  be,  these  papers  shall  only  be 
redeemed  in  gold.  It  may  be  best  to  begin  the  description  of  the 
banking  effect  of  these  nine  kinds  of  credit  paper  from  the  last  to 
the  first. 

Senator  Stewart,  being  the  greatest  enemy  of  silver  in  the  world, 
(that  is  the  person  who  has  done  the  most  to  depreciate  its  value) 
gives  us  a  good  example  of  the  gold  contract  currency,  by  his  hav- 
ing registered  about  twenty-six  of  these  gold  contracts  in  Alameda, 
Cal.  On  the  diagram  these  credit  papers  are  indicated.  They  are 
vicious  credit  paper,  the  reason  for  that  may  be  shown  thus  : 

Suppose  that  the  efforts  to  lower  the  standard  silver  dollar  to 
bullion  value  by  free  coinage,  as  in  India,  be  successful,  then  the 
debtors  who  signed  this  gold  bug  currency  (as  it  is  called)  would 
have  to  get  $200  worth  of  silver  in  order  to  pay  their  creditors  $100 
worth  of  gold  under  their  contracts.  The  creditors  would  thus 
double  the  value  of  all  their  wealth.  So  the  gold  contract  is  really  a 
very  bad  paper  currency  for  the  United  States  of  America. 

There  is  no  other  part  of  the  world  where  such  a  ctu-rency  pre- 
vails, and  it  will  be  clear  that  its  raison  d'  etre  in  the  United  States 
is  because  the  whole  body  of  legislation  in  this  country^  is  against 
silver  through  the  crowding  out  of  that  metal  by  credit  paper,  as 
will  now  be  proved.  Sweep  away  the  credit  paper,  the  gold  con- 
tract will  die. 

The  next  item  in  credit  paper  is  No.  8,  $7,000,000  fractional  cur- 
renc3\  This  was  issued  during  the  war  to  raise  mone}',  and  its 
effect  was  to  drive  out  the  subsidiary  silver,  mostly  into  Mexico 
and  Canada,  where  our  half  dollars,  quarters  and  dimes  passed  at 
their  bullion  vulue,  being  driven  out  by  Gresham's  Law,  that  the 
bad  (paper)  replaces  the  good  (silver).  Notice  now,  when  redemp- 
tion came,  the  Canadians  and  Mexicans  sent  in  these  millions  of  sil- 

16 


ver  and  received  their  face  value  from  the  Treasur>-,  making  an 
enormous  profit  out  of  Americans  by  collecting  the  diiTerence 
between  the  bullion  value  at  which  they  bought  them  and  the  face 
value  at  which  they  sold  them.  So  again  the  politicians  plundered 
the  people  of  the  United  States  of  America  of  millions  of  dollars, 
because  thej'  had  undertaken  the  banking  business  of  which  they 
were  totallj-  ignorant. 

The  old  state  bank  notes,  Xo.  7,  total  $100,000.  These  have  been 
already  dealt  with,  all  that  is  needed  to  say  is  :  "  Let  the  people  of  the 
United  States  of  America  be  warned  against  the  proposal  of  Con- 
gressman Harter,  of  Ohio,  to  repeal  the  ten  per  cent.  Federal  tax  by 
which  this  vile  credit  paper  was  finally  extinguished.  If  the  ques- 
tion of  the  power  of  the  states  to  charter  institutions  to  emit  bills  of 
credit  (which  the  states  themselves  are  forbidden  to  do  by  the  Con- 
stitution) should  ever  come  before  the  judges  then,  most  probably, 
some  tricky  lawj'er  would  gain  a  judgment  against  the  Constitution 
of  the  United  vStates  of  America  upon  the  ground  of  powers  viassa- 
tily  implied,  and  so  once  more  the  lawyers  \\o\\\i\.  justify  the  xcicked/or 
a  bribe,  as  the  good  book  says.  Let  us  put  our  foot  down  for  nothing 
but  a  United  States  note  backed  by  coin,  redeemable  ever\'where, 
and  with  three-fold  security. 

Next  in  order  comes  No.  (>.  National  bank  notes,  *^173,OO0,000. 
This  is  another  fonn  of  bad  credit  paper,  because  they  are  based 
upon  United  vStates  paper  bonds,  and  although  used  as  a  war 
measure,  thej'^  have  no  place  in  times  of  peace,  for  they  should  and 
could  be  based  iipon  silver  and  gold  only.  To  show  the  weakness,  let 
us  suppose  that  a  labor  war  should  arise  in  the  United  States,  and 
what  would  be  the  price  of  those  $175,000,000  of  bonds  ?  Probably  as 
in  the  former  Civil  War,  35  per  cent.,  or  only  $."}S,000,00().  Now 
according  to  the  national  bank  law,  our  Comptroller  of  the  Currency 
could  call  upon  the  national  banks  to  deposit  further  security — 
$110,000,000.  That  would  mean  one  of  two  things,  either  the 
national  banks  must  at  once  surrender  all  their  notes  and  all  their 
bonds  or  go  bankrupt,  one  and  all.  This  .shows  the  folly  of  credit 
paper  not  based  upon  silver  or  gold ;  and  rememlx.'r  that  this 
$173,000,000  paper  just  drives  out  that  volume  of  silver,  or  ])artly 
so,  and  really  is  one  of  the  greatest  causes  of  the  present  low  i>rice 
of  silver. 

If  you  use  sih'cr  it  will  rise ;  throw  it  out  of  demand  and  silver 
falls.     Obser\'e  that  is  the  law  all  the  way  through. 

17 


Our  national  bunk  system  is  an  admirable  system.  It  should 
embrace  all  the  banks  for  commercial  purposes  in  the  United  States 
of  America ;  and  it  can  be  made  to  do  so  if  the  principles  of  the 
Bank  of  France  be  followed,  and  a  true  silver  note  be  issued,  pay- 
able only  in  silver,  which  would  cause  the  circulation  of  the  great 
hoard  of  white  metal  now  imprisoned  by  the  political  bankers  in 
Washington. 

The  next  item  is  the  United  States  note.  No.  5,  of  $346,000,000. 
The  nature  of  these  notes  has  been  explained,  and  by  the  laws  of 
plain  connnon  sense,  they  have  no  right  to  exist,  because  they  are  a 
credit  paper,  expressly  made  forced  legal  tender  by  law,  and 
expressly  forbidden  by  law  to  be  redeemed.  The  ruin  and  misery 
that  these  same  notes  ha\^e  caused  to  the  people  of  the  United  States 
of  America,  are  well  known  to  3'ou,  but  as  this  lecture  is  to  go  to  the 
nations  of  the  world,  it  will  be  as  well  to  sum  the  disasters  brought 
o:i  by  these  notes. 

(1.)  They  were  issued  to  avoid  raising  gold  loans,  and  it  must 
be  clear  that  if  gold  loans  had  been  raised  in  their  place,  the  cash 
would  have  been  brought  into  the  United  States  of  America,  and  the 
people  would  have  drawn  upon  foreigners  for  wealth,  to  be  repaid  bj' 
the  prosperity  of  future  years.  Instead  of  gold,  these  credit  papers 
were  paid  away  to  the  poor  soldiers,  bleeding  and  wounded  upon 
the  field  of  battle,  and  the  heroes  were  swindled  by  paper  out  of  two 
thirds  of  their  wages.  Then  the  government  in  buying  from  traders 
the  supplies  needed  for  war,  could  only  buj^  $100  of  value  b)-  pay- 
ing $300  of  paper  for  the  goods,  so  that  the  permanent  debt  was 
made  larger  every  time  this  acciuscd  credit  paper  worked  its  mis- 
chief at  the  exchanges.  The  war  thus  was  made  to  cost  hundreds  of 
millions  more  than  it  otherAvise  would  have  done,  and  we  sufier  now 
the  penalty-  of  issuing  credit  paper  and  of  not  raising  gold  by  bonds. 

It  also  led  to  furious  gambling.  Gold  boards  were  founded. 
There  large  sections  of  the  nionej-  gamblers  spent  their  days  specu- 
lating in  greenbacks  and  in  gold. 

At  this  present  day  there  are  to  be  found  ignorant  people  who 
blame  all  this  on  the  bankers.  It  is  Congress  that  should  bear  the 
scanilal.  The  politicians  who  made  these  infamous  greenbacks.  The}' 
float  around  silently,  breathing  out  their  dreadful  story  of  veterans 
robbed  of  their  pa}^  citizens  ruined  in  the  gambling  hells  and  plun- 
dered by  speculators.  If  these  greenbacks  could  but  talk,  what  a 
tale  of  ruin,  miser)-,  horror,  despair,  suicide,  and  broken  hearts  they 
would  tell.     Such  in  all  ages  is  the  stor}',  when  politicians  set  them- 

18 


selves  up  as  bankers,  and  issue  credit  paper  unbacked  b}-  coin, 
instead  of  a  true  bank  note. 

France,  with  her  silver  bank  note,  passed  through  worse  stress 
than  the  United  States  of  America,  paid  a  worse  indemnity,  because 
she  rvould  not  lei  Ihe politicians  do  the  bankiu}^.  Are  these  bitter  les- 
sons to  be  wasted  ?  lyook  ahead  !  If  a  civil  war  or  any  war  should 
come,  what  will  be  the  value  of  these  greenbacks,  these  bills  of 
credit  emitted  against  our  Constitution  ?  They  would  fall,  and  in  fall- 
ing would  carry  down  the  millions  of  people,  who  hold  them,  into 
ruin  and  disgrace,  into  despair  and  death,  as  they  did  before. 

These  notes  drive  out  a  volume  of  $350,000,000  of  silver,  which 
should  and  could  take  their  place,  for  by  the  Gresham  Law  it  nuist 
hz  so.  Everybody  will  pay  away  greenbacks  (if  he  has  a  suspicion 
that  they  are  going  to  be  bad),  and  keep  silver,  but  whether  or  no, 
the  business,  which  these  paper  notes  do,  would  be  done  by  silver,  or 
by  silver  notes,  if  a  central  bank  issued  them,  through  a  federation 
of  all  the  bankers,  and  the  increased  demand  for  silver  again  would 
raise  its  value,  while  the  dollars  would  be  forced  out  of  the  Treasury 
into  the  circulation,  if  the  politicians  were  turned  out  of  the  banking 
busniess. 

The  Treasury  note  comes  next.  No.  4,  $95,000,000.  This  is  a 
financial  curiosity,  a  banking  lusiis  naturcr,  the  child  of  John  vSher- 
man's  brain,  and  Hon.  R.  P.  Bland's  pet,  till  silver  fell. 

The  Treasury  does  not  buy  silver  at  all,  it  issues  warehouse 
receipts  for  six  wagon  loads  of  bar  silver  everj^  working  day  of  the 
year,  but  the.se  warehouse  receipts  are  legal  tender  for  all  dues, 
public  and  private,  and  are  redeemable  in  gold.  If  they  were  not 
redeemable  in  gold,  they  would  only  be  worth  bullion  value,  an  1 
already  the.se  warehou.se  receipts  represent  a  larger  value  than  the 
silver  bought  with  them.  The}'  are  a  more  dangerous  currency  than 
the  greenbacks,  and  if  allowed  to  grow  to  $000,000,000  in  ten  jears, 
with  the  immen.sel}'  increasing  yield  of  silver,  they  will  throw  the 
whole  countr>'  off  the  present  standard,  because  the  Treasury  follows 
the  Russian  finance  in  keeping  a  .small  gold  balance,  by  which  out- 
side exchanges  can  be  made  in  gold,  while  all  internal  exchanges 
are  mostly  in  credit  paper. 

The  very  same  silver,  u.sed  on  banking  principles  by  lianker.s, 
could  float  a  much  larger  note  issue  .safely,  because  tlie  paper  would 
be  backed  by  100  per  cent.,  one  portion  of  which  only  would  be 
coin,  and  the  rest  visible  and  convertible  .securities,  bearing  interest. 

10 


This  sliovvs  liiat,  wlicii  politicians  pla  •  at  ]jank\n-/^  they  cannot 
make  the  money  go  so  far  as  a  banker  can,  because  he  lifts  profit  and 
makes  exchanges,  promotes  industry,  and  makes  a  larger  use  of  the 
same  volume  of  cash,  wliile  forcing  silver  into  circulation. 

Silver  certificates,  No.  3,  come  next.— $330,000,000.  This  is 
really  a  savings  bank,  in  which  the  depositors  get  no  interest  for 
their  money.  What  a  loss  to  the  United  vStates  that  such  an 
immense  quantity  of  standard  silver  dollars  .should  be  oxidizing  in 
the  vaults  of  our  Treasury  and  making  no  interest  either  for  the 
depositors  or  for  the  holders,  but  costing  the  country  a  large  sum  for 
3'early  care,  and  for  the  cost  of  certificates  and  book  keeping.  What 
-will  be  said  in  London,  Paris,  Berlin,  Rome,  and  all  the  capitals  of 
Kurope,  when  they  read  in  this  lecture  that  the  United  States  is  so 
rich  that  it  can  afford  to  throw  aside  such  an  enormous  amount  of 
wealth  for  absolutely  no  purpose  at  all  ?  When  they  learn  further, 
that  the  deposit  receipts  are  voi  /n^al  tender  between  citizens  at  all, 
but  are  only  legal  tender  to  the  Treasury  for  public  dues  ? 

This  is  the  most  complete  destruction  of  all  the  rules  of  banking, 
that  ever  was  seen  in  the  world,  and  will  be  a  lasting  wonder  to 
future  generations. 

The  law  of  banking  has  never  been  better  stated  than  in  the  well 
known  words  :  "  Why  did  you  not  pay  my  silver  into  the  bankers, 
that  when  I  came  home  I  might  collect  the  deposit  receipt  with  the 
interest  ?  "  These  dollars  might  as  well  be  wrapt  up  in  a  napkin,  as 
the  fool  did  with  his,  and  buried  in  a  hole  in  the  ground  for  all 
the  good  they  do. 

If  I  had  the  power  in  this  matter  I  would  make  a  proposal, 
which,  though  it  may  .startle  you,  will  not,  I  trust,  be  found  fault 
with.  It  is  a  simple  business  proposition.  I  would  tajce  100,000,000 
of  the.se  idle  silver  dollars  and  build  the  Nicaragua  Canal  with 
them,  charging  5  per  cent,  interest  on  the  loan,  and  5  per  cent,  com- 
mission for  discounting  the  bonds.  I  would  place  the  whole 
|;100,000,000  of  Nicaragua  Canal  bonds  in  the  Treasury-,  and  also 
the  $70,000,000  of  Canal  stock  offered  b}-  the  companj^  as  collateral. 
and  thus  having  the  canal  built  under  the  superv'ision  of  our  engi- 
neers, and  the  stock,  as  fast  as  it  was  subscribed  being  paid  off  the 
bonds,  I  would  make  the  loan  secure  and  build  the  canal. 

Thus  the  idle  dollars,  which  have  fallen  in  value  $110,000,000  since 
they  were  paid  in,  would  be  turned  to  safe  and  profitable  use,  and  the 
United  States  would  have  the  honor  of  building  the  canal,  without 
breaking  the  Clayton-Bulwer  Treaty  in  any  shape  or  form. 


All  that  would  be  necessar\- would  be  a  .->;:' >il  j.nipoweriiig  Bill 
and  amendmeut  to  the  Act  of  the  Silver  Certificates,  in  o:.lcr  to 
enable  the  work  to  go  through  at  once.  vSo  California  would  have 
the  honor  of  having  found  the  money  to  build  the  canal  by  simply 
using  the  hundreds  of  millions  of  idle  dollars  lying  in  the  Treasury. 

That  is  the  method  by  which  bankers  make  money.  They  take 
deposits  like  these  $330,000,000  and  keep  the  reserve  to  pay  the 
moving  demands,  they  then  put  out  the  balance  in  loans  on  stocks, 
bonds,  etc.,  and  thus  they  earn  the  interest  of  which  the  Master 
spoke. 

It  is  the  greatest  of  all  follies  for  a  state  to  undertake  paternalism, 
and  this  leads  to  the  second  cause  for  the  fall  of  silver,  that  is, 
"The  paternal  system  of  political  banking."  All  these  great  bank- 
ing crimes  arise  just  there,  unscrupulous  politicians  in  all  the  nations 
of  Europe  and  in  the  United  States  of  America  want  to  finger  the 
cash,  to  make  places  for  their  relatives  and  friends ;  they  then 
undertake  to  issue  credit  paper  based  upon  nothing,  persuading  the 
unfortunate  people  that  it  will  be  for  their  good. 

When  this  credit  paper  is  first  issued  it  causes  an  enonnous  pros- 
perity, then  the  politicians  pick  up  the  plunder.  liye  and  bj-e  tlie 
day  of  reckoning  comes,  it  has  to  be  paid  and  there  is  no  cash,  or  only 
a  small  portion,  to  pay  it,  the  paper  falls,  everybody  is  ruined,  and 
they  all  damn  the  bankers,  who  have  had  nothing  whatever  to  do 
with  it. 

Reasoning  with  an  American  on  the  folly  of  i.ssuing  greenbacks, 
lie  said  :  "  But  we  make  interest  on  that  $240,000,000."  No,  you 
do  not ;  a  properly  banked  money  earns  interest  and  advances  trade. 
Thus  if  these  greenbacks  were  replaced  with  a  true  silver  note,  th.e 
Central  Bank  would  be  lending  millions  to  trade  and  farmers,  l!iro;igh 
the  western  banks  ;  but  you  stand  exposed  to  be  blown  up  by  a 
financial  cyclone  by  these  very  credit  papers.  If  any  great  famine  or 
war  should  come,  you  displace  silver,  $1,000,000,000,  and  damage  all 
the  miners.  There  is  no  money  to  lend  to  the  farmer  and  to  trade, 
because  the  monc}^  is  a  debt  and  not  a  capital.  You  cannot  make 
money  out  of  a  debt,  but  only  out  of  capital  (or  savings). 

It  ma}'  be  hard  for  some  people  to  see  tlirongh  tliat  reasoning,  but 
It  is  as  .solidly  true  as  the  earth  it.self.  Thus  the  Bank  of  1-Vancc 
with  its  silver  note  lends  to  trade  and  to  farmers  through  258 
branches  ;  but  with  our  credit  paper  we  danui  both  .»^ilver  and  trade, 
and  stand  to  be  blown  up  financially  in  a  war.  So  nuicli  for  p<:)liti- 
cal  banking;  it  is  tlie  curse  of  the   I'.Hh  century.     Sweep  it  away  1 

21 


Restore  silver  !  Destroy  credit  paper  !  You  will  Lave  to  tax  your- 
sslves  of  course,  but  you  will  have  all  the  money  in  trade  that  you 
want.  Ivondon  money  is  now  1  per  cent,  per  annum.  In  France 
about  3  per  cent.     Here  it  is  10  per  cent.,  in  the  country. 

Russia  would  make  55^300,000,000  profit  by  founding  a  silver  note, 
because  she  would  raise  $900,000,000  paper  from  GO  per  cent.,, 
present  value,  to  100  per  cent.  Yet  the  Czar  has  just  ordered  the 
issue  of  $100,000,000  more  credit  paper  to  be*paid  to  the  people  for 
connnodities.  Such  is  the  infatuation  of  European  paternal  politi- 
cians, that  they  cannot  see  they  are  only  making  matters  worse  ;  for, 
like  our  greenbacks,  this  paper  will  really  be  taking  their  goods  on. 
loan  from  them  and  giving  them  nothing  but  wind  in  return.  Those 
who  sow  the  wind  shall  reap  the  whirlwind. 

Take  Italy;  if  she  would  set  all  her  soldiers  to  manual  labor  and' 
employ  the  cash  received  in  buying  silver  to  back  her  credit  paper, 
she  would  be  able  to  redeem  the  hundreds  of  millions  of  silver  that. 
France  holds  against  her.  She  would  lift  the  value  of  her  credit 
paper  to  par,  and  make  hundreds  of  millions  profit,  besides  blessing 
her  people  with  lighter  taxes,  for  the  same  tax,  collected  in  paper 
which  is  at  par,  would  produce  a  greater  revenue  and  cure  the  dread- 
ful deficits  wdth  which  Italy  is  afflicted. 

Austria  too  is  full  of  forced  credit  paper,  and  all  her  business 
suflfers  in  consequence  ;  instead  of  handing  over  the  monetary  currenc}' 
to  a  bank,  she  also  follows  paternalism  and  uses  political  banking. 

All  these  credit  paper  nations  have  at  present  got  a  bad  attack  of 
the  gold  fever,  and  are  proposing  to  sell  their  silver  in  order  to  put 
their  paper  upon  a  gold  basis.  But  this  will  only  make  the  matter 
worse,  because  the  actual  money  needed  to  back  the^M;  issues  is  some- 
thing over  $1,500,000,000,  and  that  amount  of  gold  cannot  be 
found.  It  is  true  that  Mr.  Ottomar  Haupt,  the  banker  of  Berlin, 
declares  that  there  is  no  gold  famine  because  all  the  gold  that  is. 
wanted  by  Austria  can  be  easily  forced  over  from  the  United  States. 
That  is  the  effect  of  our  credit  paper;  it  flows  out  into  the  channels  of 
commerce,  growing  ever>-  day  in  hundreds  of  thousands  ($150,000  in 
new  silver  notes  every  twenty-four  hours),  and  these  being  everj-- 
where  exchangeable  for  gold,  it  is  only  a  question  of  time  till  the 
last  gold  dollar  will  be  driven  out.  But  even  if  all  the  gold  in  the 
United  States  of  America  should  be  taken  away  by  Europe  to  back 
their  credit  paper,  still  that  would  not  be  half  enough  to  supply 
them.  What  would  be  our  condition  with  all  cur  gold  gone  ?  To 
what  premium  would  all  the  gold  contracts  arise  ?     What  would  the 


debtors  do  to  liquidate  their  gold  contracts  ?  Wuuld  it  not  bring  on 
a  revolution?  Is  theie  not  a  fear  that  the  people,  seeing  how  tl:e 
politicians  had  wrecked  the  country-,  will  revolt  as  they  did  against 
the  Continental  not^-s,  and  abandon  the  whole  business  by  repudia- 
tion ? 

Despair  is  a  drcadfnl  master.  W'heu  the  jieople  abandoned 
the  $200,000,000  of  Continental  rot.: ,  what  ruin,  suicide  and  des- 
peration followed  the  loss.  How  much  greater  would  be  that  ruin, 
loss  and  desperation  when  the  sum  was  $1,100,000,000  ? 

The  statement  of  Mr.  Ottomar  Haupt  shows  you  that  ICurope 
can  just  throw  us  into  that  position  whenever  it  pleases  to  do  so.  So 
we  must  take  up  our  credit  paper.  I  have  just  shown  the  abandon- 
pient  of  silver  by  the  politicians,  let  us  sum  it  up  and  .see  what 
Europe  has  so  far  l^egun  to  abandon. 

Germany  has  abandoned ....  Ci')7,."jOO,000 

Germany  wants  to  sell 1(»()',(MM),(KM) 

Russia  has  abandoned  all  silver !»l)(1,( KM ),()()() 

Austria  wants  to  abandon SO,(HM),(l(K» 

Italy  has  driven  out 7:2,(K)(),(MM) 

Italy  wants  to  sell 10,(XK),(«X) 

Belgium  has  driven  out  and  wants  to  sell G-"),(K)(),(MH) 

Greece  has  nothing  but  paper U.5,0(K),()(K> 

Roumania  sold o, 000,000 

France  stands  alone  in  the  wild,  stormy  frenzj'  against  s.l\cr, 
quietly  increasing  her  gold  reser\^es  week  by  wx^ek. 

Cause  No.  4  is  the  utter  absence  of  control  by  bankers.  In  all 
the  nations  the  bankers  seem  stupidl}-  helpless.  Why  do  they  allow 
this  credit  paper  in  their  several  lands?  Why  do  they  not  form 
societies  to  protest  against  it  ?  The  public  abu.se  them  as  if  their 
profession  was  that  of  thieves,  when  they  are  or  should  be  the  safe- 
guards of  trade  and  the  rock  of  the  state.  Bankers  lamely  submit 
to  abuse,  and  seem  by  this  silence  under  abu.se  as  if  they  were  con- 
tent to  be  classed,  by  the  public,  as  thieves.  The  time  has  come 
when  bankers  must  join  and  teach  the  people  how  wicked  the  pol- 
iticians are,  and  save  the  people  from  the  follies  of  credit  paper  and 
from  political  Ixmking. 

The  remed}',   of  course,   is  an  International  Treaty.     That  tre;:ly 
must  embrace  : 

(1)  The  foundation  of  banks  to  control  the  i.ssucs. 

(2)  The  abolition  of  credit  paper  and  of  political  banking. 

(3)  The  use  of  a  silver  note  like  that  of  the  Hank  of  I'rance, 
kept  in  constant  redemption  l^y  the  TV-derated  banks,  who  liold  Ib.e 
last  gold  and  silver  rc-ier^xs. 


Who  shall  negotiate  tliis  treaty?  ];xpert  ])iin\dng  ambassadors 
nppoiiited  by  the  Chief  Ivxecutive ;  these  to  confer  with  similar 
ambas.^adors  appointed  b}-  tlie  nations.  The  free  coinage  of  silver 
need  not  be  tonched  at  all ;  it  does  and  can  only  destroy  the  use  of 
silver,  nor  need  the  question  of  ratio  be  brought  into  it. 

The  true  i)lace  then  of  silver  in  the  circulation  of  the  whole 
world  is  to  issue  in  each  country  a  true  silver  bank  note,  like  that  of 
the  Bank  of  l-Vance,  through  the  federated  banks  of  each  countr}', 
and  to  sweep  away  forever  all  false  credit  paper,  and  all  political 
banking  ;  to  pay  these  bank  notes  only  in  silver,  as  the  Bank  of 
France  does,  and  so  force  silver  into  use  all  over  the  world.  There 
is  no  need  to  wait  for  England,  though  India  must  follow  suit. 

Will  the  nations  adopt  that  treaty  ?  They  j>i2(sf.  If  they  do* 
not,  the  financial  dynamite  bomb  of  Credit  Paper  (upon  which  we 
are  all  sitting,  England  included),  will  burst  one  day  with  frightful 
force  and  send  down  our  boasted  civilization  in  ruins. 

Suppose  the  nations  adopted  free  coinage  of  silver  ;  then  as  fast 
as  the  silver  coins  went  into  circulation  the  credit  paper  would  drive 
them  out  of  the  country,  just  as  the  fractional  currency  paper  drove 
out  our  subsidiary  silver  in  the  United  States  of  America  into  Can> 
ada  and  into  Mexico,  and  robbed  us  of  millions  of  dollars  to  redeem 
them  again,  so  the  credit  paper  will  surely  drive  out  free  silver  too. 
Thus  the  free  coinage,  of  silver  would  tax  the  people  50  per  cent,  to 
undertake  it,  because  the  65-cent  dollars  would  collect  ]00  ceiits 
worth  of  labor  or  goods  from  them  in  the  exchange,  and  then  would 
leave  them  worse  off  than  before,  with  nothing  but  credit  paper 
again. 

The  nations  musf  adopt  banking  aiso,  because  of  the  great  r^^'ofit 
they  will  make  b}'  raising  all  the  credit  paper  to  par,  jmd  all  the 
silver  in  the  world  to  par.  The  profit  will  be,  first  on  the  sum  of 
^3,000,000,000  credit  paper  placed  upon  a  banking  basis  ;  and  then 
on  $3,700,000,000  silver  restored  to  129  cents  an  ounce,  besides  on 
the  $3,000,000,000  of  silver  which  will  be  mined  in  the  next  20 
years,  and  which  Vv'ill  bring  129  cents  per  ounce  instead  of  85  cents 
per  ounce. 

Plow  will  the  nations  pay  the  taxes  ?  Going  back  to  old  da5-s  of 
heathen  Rome,  we  see  today  those  old  Roman  roads  which  have 
stood  the  storms  and  changes  of  2,000  years.  Those  roads  were  made 
by  the  Roman  soldiers.  It  was  the  practice  of  Romans,  in  order  to 
keep  their  soldiers  strong  in  bod}-,  and  in  full  discipline,  to  make  the 
.soldiers  do  work  in  building  roads,  aqueducts  and  canals.     Suppose 


the  idle  soldiers  in  the  barracks  of  the  Christian  nations  were  put  to 
work  to  make  railroads  and  canals  through  all  the  countries  of  all  the 
nations  of  the  world,  and  the  money  earned  by  their  labor  being  paid 
in  silver  to  the  several  Christian  Treasurers  the  bill  would  foot  up  in 
this  way  :  8,000,000  soldiers  at  $1.00  a*  day,  taking  300  working  days  in 
fhe  year,  would  give  a  yearly  receipt  of  $2,400,000,000  of  silver  to  be 
received  ever^'  year,  that  would  soon  put  the  credit  paper  to  rights 
^ud  raise  silver  to  par  without  even  asking  England's  permission. 

Then  the  canals  and  electric  railroads,  made  by  the.se  strong 
men,  would  lift  up  tlie  power  and  wealth  of  the  countries  many, 
many  fold,  increase  the  value  of  property,  and  lower  taxation  all 
over  the  world.  While  the  soldiers  (if  you  nmst  have  them)  would 
be  more  healtli^'  with  12  hours  a  day  hardwork,  more  free  from  dis- 
ease, more  noble  in  soul  and  body,  useful,  instead  of  hurtful,  orna- 
mental to  mankind  instead  of  being  a  financial  nuisance. 

Where  there's  a  will,  there's  a  way.  Now  that  (for  the  first  time 
in  the  history  of  mankind)  the  mask  has  been  torn  from  the  face  of 
the  politicians,  it  remains  for  the  people  of  the  earth  to  carrj-  out 
this  plan  and  to  redeem  themselves  from  the  curse  of  credit  paper, 
from  the  heavy  war  taxes  and  to  begin  the  reign  of  that  promised 
peace  for  which  we  hope,  when  mankind,  redeemed  from  war  with 
its  armies  shall  sing  :  "  Glory  to  God  in  the  highest,  peace  on  earth, 
good  will  to  man." 


These  are  a  few  replies  in  answer  to  criticisms  by  bankers  : 

Banker. — Tell  me!     How  would  you  dispose  of  the  greenbacks  ? 

Answer. — Call  them  in  and  replace  them  witli  a  2 '2  per  cent, 
bond,  as  was  done  by  Hon.  Charles  Fo.ster  with  the  4>j's  in  1891. 
That  would  put  an  end  to  them  without  trouble,  if  you  pas.sed  a  law 
repealing  their  legal  tender  power,  and  forbidding  all  credit  paper. 

B.\NKER. — How  would  >ou  extingui.sh  the  National  Bank  credit 
paper,  which  you  condemn  ? 

Answer. — In  the  same  way  ;  let  the  National  banks  redeem 
their  notes  and  surrender  the  bonds  as  fast  as  the  notes  are  redeemed. 

Banker. — How  would  you  deal  with  the  silver  certificates  ? 

Answer. — Hand  them  over  as  deposit  receipts  to  the  federated 
clearing  houses  and  let  the  Central  Clearing  Hou.se  Bank  call  them 
in  for  a  true  silver  bank  note  ( Hke  the  Bank  of  France)  ;  that  wouki 
enable  the  Central  Clearing  House  to  lend  to  the  Nicaragua  Canal 
$100,000,000,  and  to  lend  to  farmers,  and  to  trade  (but  only  through 


IfK-al  clcariiij^f  houses  aiul  hanks,,  on  tlr.ec-fcjUl  security)  $100,000,000 
more  in  silver. 

P>.\nki-:k. — How  would  you  found  the  Central  Clearing  House 
Bank  ? 

An.swi;r. — As  alread}- .shown  in  the  California  Baiikcrs'  Magazine. 
That  is,  join  all  the  local  clearing  houses  into  a  federation,  electing 
12  directors  to  form  the  board  of  the  Central  Bank,  which  should  be 
placed  centrally.  Let  all  the  loans  of  coin  be  made  by  notes  issued 
to  the  local  clearing  houses,  and  by  them  to  the  several  banks. 
Each  bank  to  have  its  notes  stamped  with  its  own  name,  and  to  be 
paid  two  thirds  of  the  net  profit  on  the  amount  kept  in  circulation 
for  12  months,  the  remaining  third  to  be  the  profit  of  the  people  of 
the  United  States.  The  Treasurer  and  Comptroller  of  the  Currency 
and  Director  of  the  Mint  to  be  ex-officio  members  of  the  central 
board  of  directors.  All  government  funds  to  be  banked  in  the  local 
clearing  houses. 

26 


CALIFORNIA 

Safe  Deposit  and  Trust  Company 


PAID   UP  CAPITAL,   $1,000,000 


Cor.  Montgomery  and  California  Sts.,  San  Francisco.  Cal. 


This  Company  is  authorized  to  act  as  Executor,  Administrator,  Guardian,  As- 
signee, Receiver  or  Trustee.  It  is  a  legal  depository  for  Court  nnd  Trust  Funds. 
Will  take  entire  charge  of  Real  and  I'ersonal  Estates,  collecting  the  income  and 
profits,  and  attending  to  all  such  details,  as  an  individual  in  like  capaci'.y  could  do. 

(All  investments  of  trust  funds  amd  the  title  thereto  kept  separate  and  apart  from  the  assets  of 
this  Corporation.) 

$200,000  in  securities,  are  deposited  with  the  TREASURER  OF  STATE  to 
secure  the  trust  liabilities  of  this  class,  and  the  deposit  is  not  liable  for  any  other 
obligations  of  the  Company  until  all  such  liabilities  have  been  discharged. 

Acts  as  custodian  of  Wills,  and  consults  as  to  trust  matters,  wiTHOUr  charge. 

Receives  Deposits  subject  to  check,  allowing  interest  on  daily  balances,  and 
issues  Certificates  of  Deposit  bearing  interest.  Acts  as  Registrar  and  Transfer  Agent 
of  all  Stocks  and  Bonds.  , 

On  Ordinary  and  Term  Deposits  in  the  Savings  Department,  the  highest  rates  of 
interest  paid  consistent  with  prudent  banking. 

Magnificent  Burglar-proof  Vaults  with  small  safes  to  rent  at  moderate  charges. 
Unsurpassed  facilities  for  the  storage  of  Plate,  Jewels  or  valuable  goods  of  merchants 
and  others. 


OFFICERS 

J.   D,  FRY,  Prcslilent 

HENJIY  WILLIAMS.  VicePres.      J.  M.  HUOTWELL,  2a  Vice  I'res.       J.  D.\LZKLL  BUOWX.  Secn'tarj 

8,  I'.  YOUNG.  Trea.surer  and  Manager 

UIRECrORS 

J.  I).  Fry  Urnry  Williams  .1.  M.  .Shotwell  I   G.  Wjckorsham 

C.  F.  MacDcrinot  Charles  Main  .las.  Troadwell  IIunuT  i5.  KiuK 

Robt.  D.  Fry  Thos.  K.  Hayes  J.  C.  Johnson 


The  rate  of  interest  ou  Term  Deposits  for  six  months  ending  DcccnilHT  31,   1391,   was  at  5  40-10)  per 
«ent.  per  annum,  and  on  Ordinary  Deposits  at  4  50  100  per  ce:it.  i«r  annum. 


the: 


STATE     INVESTMENT 


AND     INSURANCE     COMPANY. 


ESTABLISHED    1871. 


CAPITAL  STOCK,  Paid  Up $400,000  o^ 


PRINCIPAL     OFFICE  : 


218    AND    220    SANSOME    STREET, 

San  Francisco,  California. 


GEORGE  L.   BKANDER,  CHAS.   M.   BLAIR, 

President.  Secretary. 


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26,  28,  30  O'Farrell  St.     they  are  known 
for  low  prices.     thb  leading  agencies  of 


THE    WORLD    FOR    BRASS  AND    STRINGED    INSTRU- 
MENTS AND   SHEET  MUSIC. 


KOHLER   &   CHASE 


28-30  O'Farrell   Street 


THE    BANK    OF    CALIFORNIA, 

Agent  for  Pacific  Coast. 


Tlic  Hank  will  rccciv-.-  subscriptions  and  make  delivery  of  bonds  as  stated  below. 
Prospectus,  full   information  and  subscription  papers  can   be  had   on  application  to 
the  bank. 


$5,000,000 

NICARAGUA  CANAL  CONSTRUCTION  CO.'S 

SIX     PER     CENT     BONDS, 

DuK  July  ist,    1897. 


INTEREST  PAYABLE  JANUARY  ist  AND  JULY  1st. 

COUPON   BONDS   OF  $1000,  $500  AND  $100  EACH. 

Piincipxal  and   Interest  payable  at  the  Manhattan  Trust  Co.,  New  York  City 
and  at  the  Bank  of  Cahfornia,  San  Francisco,   CaL 


These  bonds  are  secured  by  an  assignment,  in  trust,  to  the  Manhattan  Trust  Com- 
pany of  Kew  York,  Truste  «  of  a  certificate  of  the  Maritime  Canal  Company  of  Nicar- 
agua for  $5,000,000  of  its  long  term  bonds,  authorized  to  be  issued  by  the  said  Maritime 
Canal  Company  under  its  charter  by  Act  of  Congress  of  the  United  States,  approved 
February  20,  1889. 

They  are  redeemable  within  five  years  at  par.  or,  at  the  option  of  the  Construction 
Company,  are  convertible  at  maturity  into  the  bonds  of  the  Maritime  Canal  Company. 

Interest  at  six  per  cent  per  annum,  till  maturity,  is  provided  by  a  special  cash  deposit 
therefor  with  the  Manhattan  Trust  Company  of  New  York,  Trustee. 

A  bonus  of  twenty  per  cent  in  stock  of  the  Maritime  Canal  Company  of  Nicaragua  is 
ofiered  with  ach  subscription  to  these  bonds. 


Offices  of  the  Company:     No.  44  Wall  Street,  New  York. 


See  page  20,  The  whole  of  the  money  found  for  finishing  the  Canal. 


Hall's    Safbs 

ARE    THE     BEST     IN     THE     WORLD. 

We  have  ilesigned  and  built  the  Vaults  and  Safes  of  the  following 
BANKS     IN     SAN     FRANCISCO: 

CROCKER-WOOLWORTII  NAT.  IJANK,  THE  IIIUERNIA   SAVINGS  BANK, 

GERMAN  SAVINGS  BANK,  PEOPLE'S    HOME    SAVINGS     AND 
UNITED  STATES  MINT,  SAFE    DEPOSIT, 

WELLS,  EARGO  &  CO.'S  BANK,  LONDON,  PARIS  &  AMER.   BANK, 

BANK  OF  BRITISH  COLUMBIA,  AMERICAN  BVNK  &  TRUST  CO., 

SECURITY  SAVINGS  BANK,  NEVADA  BANK, 

AND  OF  ALL  LEADING  BANKS  ON  PACIFIC  COAST. 


Hall's   Sake   and    Lock   Co., 

609-611     Market    Street,    San     Francisco. 

J.   W.    HUGHES 

Plans,      IVTechLanical     Drawings     and 
Sections,    and    IVIaps 

BY    THE     CHEAPEST     KNOWN     PROCESS    OF 

WAX  ENGRAVING 


Real  Estate  Dealers,  Bankers,  Surveyors,  and  Periodicals  of  all   Kinds 

Can  get  Better   Work  for  less  Money  by  this 

Engraving  Process 


408    CALIFORNIA    STREET 

Nexi  Door  to  Bank  of  C.\lifornia  San  Francisco,  Cal. 


INCORPORATED     1863. 

K.    H.   McDoNAiD,  I'lesident. 
I'KANK  V,   iMcDoNAi.n,  Cashier.  K.   H.   McDonald,  Jr.  Vice-President. 


PACIFIC   BANK 


SAN  FRANCISCO,  CAL 


Oldest  Chartered  Commercial  Bank  on  the  Pacific  Coast 


PAID-UP     CAPITAL,     IN     GOLD 
SURPLUS  .... 

AVERAGE     RESOURCES 
YEARLY    VOLUME    OF     BUSINESS 


$1,000,000 

800,000 

4,750,000 

225,000,000 


Depositors  secured  by  the  unlimited  pro  rata  guarantee  of  all  the  shareholders. 

Banking  Connections  in  all  the  important  centers  of  the  world. 

Letters  of  Credit  for  use  of  travelers,  available  in  all  parts  of  the  world. 

Telegraphic  Transfers  in  Cipher  made  in  London,  I'aris,  Berlin  and  various  places  in 
the  United  States. 

Drafts  issued  on  Australia  and  the  Orient. 

Dividends  and  Coupons  collected. 

Bullion  bought  and  sold. 

Orders  executed  by  all  Investment  Securities. 

State,  County,  City  and  Water  Bonds  negotiated. 

Approved  Business  Paper  discounted  or  received  as  Security  for  Loans. 

Loans  on  Goods  in  Transit. 

Loans  on  Warehouse  Receipts. 

Collections  on  the  Pacific  Coast,  Mexico,  Central  and  South  America,  New  Zealand,^ 
India,  China  and  Japan,  handled  at  lowest  rates,  with  promptness  and  dispatch. 

Bills  drawn  on  Union  Bank  of  London,  Credit  Lyonnais,  Paris  and  DirectioQ  der 
Disconto  Gesellschaft,  Berlin,  and  other  important  cities  of  Europe. 

UNIVEKSITY  <rf  CA!:Ji?5(mNiA 

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